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What is the difference between SEM, SEO, PPC and AdWords?

Online marketers and businesspeople talk a lot about SEM, PPC, SEO and AdWords – but these concepts often become confused. This can lead to problems in choosing the ‘online marketing best-next-steps’ for a business. Here is an overview that helps put it all into perspective…

SEM = Search Engine Marketing

SEM is marketing and technical work designed to increase a website’s visibility on Google and other search engines. SEM can include…

SEM is big business. There are thousands – soon I predict millions – of companies and consultants who specialise in this field. Companies like Google and Yahoo make almost ALL of their money from SEM, including their huge PPC text ad fees.

SEO = Search Engine Optimization

SEO is work that makes a website ‘search engine friendly’ – with the goal of getting a good position in the search results when people search for words that relate to your website.

SEO relates ONLY to unpaid, ‘organic’ or ‘natural’ search results. This has nothing to do with PPC Advertising.

The best position in organic search results is #1 on the 1st-page. Many businesses have to settle for any 1st-page position, at least as an early goal.

You can’t pay the search engines to get a better organic search position – you have to work at it.

Organic position is important because every time someone visits your site after clicking an organic search result, you have received a visitor who’s probably interested in your website – and you’ve paid nothing to attract that visit (unless you’re paying a lot of money to an SEO consultant).

SEO is directly related to satisfying your online visitors!

What do people want from a website?

They want an easy-to-understand website with clear navigation. They want to read good writing that is well-organised and logical. They want to find something that is directly relevant to their original search. They don’t want to hunt around for information.

They want the next steps – getting more info or making a purchase – to be easy and obvious. They want it to be easy to find their way back to the site.

The good news: Google and other search engines want the same things from a website as your visitors do. Once you’ve built a good website for visitors, good basic SEO just calls for a few quite basic technical tasks – to ensure that search engines have an easy time understanding your website.

People often talk about different tricks to improve search engine ranking for their sites. Some tricks have worked well; these include creating many different pages and sites that all link back-and-forth and repeat the main search words over-and-over-and-over. The problem is that this forgets about the MAIN point in online marketing: Customers! A site using lots of SEO tricks is annoying for visitors. Fortunately, Google and the other engines are getting smarter. Sites that try these tricks are dropping off of Google’s 1st-page results, whereas honest, good-quality websites with good information are getting preferential treatment.

One area of SEO that is hard to do yourself is link building.

Search engines like sites that have lots of hyperlinks connecting inward and outward with related, relevant websites. You can pay people to accelerate the process (sometimes in tricky, ‘fake’ ways that can be dangerous to your website reputation). Even without link-building tricks or consultants, links grow in number and relevance naturally over time (IF you have good, unique, relevant content).

To get a few high-value, high-relevance links, be generous when linking to other relevant sites and pages that compliment your own content – and ask owners of other sites to do the same for you.

Social media is pouring gas on the linking fire: Websites that people love get shared within social networks and create thousands of links. Google and other search engines are starting to get on-board, listing profiles within social networks for some searches (especially when the profiles are highly-relevant and popular). You can make it easy for readers to share your content on social networks.

That last activity can tie into your email marketing, if you encourage people to share email content by putting it into your website or blog and giving them easy links that lead to the sharing tools at social network sites.

PPC includes ads on Google, Yahoo and Bing – these are the ads you see at the top and right-hand side of search pages – or even on Facebook pages.

It is easy to spot 'AdWords' paid ads in your Google search results

Usually PPC ads cost nothing to display – when a viewer clicks on the ad, only then is an advertiser is charged for the ad – hence ‘pay-per-click’.

In some cases ads are charged per 1000 ‘impressions’ (1 impression = the ad appears one time on a webpage displayed on one person’s computer).

The most popular PPC program is Google’s AdWords, accounting for around 90% of PPC ad dollars. In my experience, AdWords has been the most profitable choice due to the high percentage of total web search traffic on Google. AdWords is, however, becoming more competitive and costly every day which reduces the return on every advertising dollar you invest. Other networks are working hard to offer attractive systems and traffic to advertisers – trying to get a bigger piece of Google’s pie.

The most popular PPC ads are text ads like you see on Google’s search page. Video and display ads (display ads have a photo or graphic or logo) are also common and can appear on almost any website (although they are generally ‘served’ from an advertising provider like Google).

PPC is a very easy way to promote your website when getting a 1st-page organic position is a longer-term, more difficult goal.

PPC is generally profitable when your business targets a specific segment of the market with a relatively unique product or service or offer – and when there are not a lot of competitors bidding against your ads and driving up the cost of your PPC efforts.

The basic measures of PPC accounts are:

CPC (Cost Per Click – the amount you pay each time someone clicks an ad and is directed to your site). CPC can range from a few cents for specialised, uncompetitive business niches – up to $50 or more for highly competitive industries like financial services.

Cost Per Conversion (the amount you spend before you get one sale, signup or other goal). If you ‘convert’ one out of ten visitors, and you pay $1.00 for each visitor from Google (ie: CPC = $1.00), then your Cost Per Conversion will be $10.00.

Choosing the right bit of SEM for your website

Some people guess that common sense and intuition are all that’s needed, but SEM is not as easy as it seems.

On the other hand, SEM consultants and web developers are notorious. They talk clients into doing everything all at once – paying huge fees for huge projects, when just a bit of the work on the right bits creates 90% of the profitable impact.

An experienced person can spot the best items to work on in order to make changes that pay off and, often, these are not the most costly items. Making a profit online demands the right decisions!

CPC can range from a few cents for specialised, uncompetitive business niches – up to $50 or more for highly competitive industries like financial services.

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Comments

Hi John,
SEM – Search Engine Marketing – is the management of business visibility on search engines. This includes PPC (pay-per-click), SEO (search engine optimisation), content creation, and in my opinion it will increasingly also include social media and online reputation management.
PPC is a specific field only concerned with paid ads, the main example being Google AdWords.
Cheers,
Ken

My impression is that google adwords works better on products where there are large margins unless your product is extremely unique. It is also my impression that most of the advice around SEO focuses on the writing side of things where as link building is just as important to give the website credibility, but there seems limited focus on it in most of the online advice.

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